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tv   Wall Street Journal Rpt.  NBC  September 27, 2009 2:30am-3:00am EDT

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rates are staying low. not all the news is good. we'll tell you what it all means. sdmrirchlgs and our one-on-one with britain's former prime minister tony blair. we'll talk peace in the middle east, the global economy and government regulations. the richest man in the world talks about fixing america's schools, technology, and whether or not weather robots are a threat. my conversation with bill and melinda gates. the wall street journal report begins right now. nimplts this is america's number one financial nudz pj=gram. the "wall street journal" report. now maria bartiromo. here's what's making news as we head into the new week on wall street. as expected, the federal reserve kept a key interest rate at near 0%. the fed's open market committee also released a statement saying that an economic recovery was underway, but also signalled that it was way too early to start raising interest rates. in addition, the fomc said it would continue a program designed to keep mortgage rates low. at least until march. sdmrimplts seven existing homes fell unexpectedly meanwhile in
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the month of august. a mild setback in the recovery from a three-year slump. analysts were expecting a slight increase rather than the 2.7% decline. it was a choppy week for the dow jones industrial average, falling 45 points on monday, but on tuesday it touched 9,900 and closed at the highest for the year. the markets tumbled on wednesday and thursday and continued down on friday. two major banks say they'll overhaul overdraft fees. bank of americas it will stop charging those fees when accounts are overdrawn by $10 or less. jp morgan chase says it will eliminate overdraft fees when accounts are overdrawn by $5 or less. the federal reserve gave its sproou view on the economy and world leaders gathered at both the assembly and the g-20 sum knit pittsburgh to discuss the global economic recovery this week. what lessons can be learned from the economic crisis, and can they be a gtideline for the future? joining us now with their answers and thoughts ken rogoff and kevin reinhart, authors of
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"this time is different." kent, good to have you on the program. carmen, good to see you. congratulations on the book "this time is different." i want to ask you why it's different and ma can we learn from this, but let me first begin with what some of the issues were this week that we are all talking about and the news of the week. the federal reserve's open market committee releasing the monthly statement saying that economic activity has picked up and that we'll continue to see low levels of the fed's rate. what does that language signal, do you think, for an economic roer? >> i think that they recognize this is going going to take a long time, and that is one lesson we find from past crisis in our book is that we've come out of it at a normal speed. i guess we would say. unemployment lingers. lots of other problems. >> carmen, you took -- and kent, a massive kwaupt tative approach in writing the book and using data to tell the history of financial crisis from the 1300s
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to today. how should we interpret the economic data and the calendar to understanda.here we are in the evolution of this current cries? >> in terms of the current crisis, i think the signs all point to being the worst is over. we're near a trough. that's pretty much in line with what we've seen before. the question is, of course, the recovery, and our own readings, as ken was saying, these recoveries do take a while, and it will be a couple of years before we get to where we were before the crisis if history is anything. >> what's next this n that evolution? where are we in the cycle? >> across the bottom where we are right now to getting back to where we were. we're two xears away, using a
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standard pattern. i think some of the bad news is behind us, but we haven't seen the worst in unemployment. >> i throw in that we find that equity parts tepid to come back faster than housing prices. housing prices take a very long time. sdoo let me ask you about that, ken. the strength and weakness of the dollar appears to be one of the drivers of the stock market recently. what does that tell us about the markets, and why has the market come back so quickly? this is just a typical move, or is something driving the market? >> i hesitate to say typical, but the equity markets do come back after two or three years. maybe they reached a peak. want two or three months, but two or three years. you know, it's not so unusual what's happening. they're looking ahead to the normalization. with we could look at the particulars of the situation. whether growth will be fast enough to justify how much they've come up. >> what about debt? you took a real close look at
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debt and the role of debt in financial crisis in the past. are we taking on too much debt as a country right now some. >> well, we're certainly, again, driving down the traps of these past crisises where debt nearly doubles within a few years, and i think the scary part of the crisis and part of the aftermath of the crisis is that the dt becomes a problem down the road. are we employing to raise taxes? are we employing to -- >> we solved the short-term. it's not a crisis anymore, but then also the longer term are we going to raise taxes? what are we employing to do? >> this is the first crisis since the great depression that truly is global in scale. >> absolutely. >> you mentioned the g-20. this week we saw some members form coordination on a couple of issues. you really don't expect anything major to come out of these meetings, but i guess people like the idea that we've dpot the leaders of the largest industrialized country talking together, but can a consistent international regulatory
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standard come out of this? should it? >> boy, that's a tough question. i mean, clearly we live in a globalized national system, and you need to do something to prevent money from just going to the lowest common denominator. on the other hand, the banking systems are so different, the financial systems are so different, that's why i don't think anything big will happen quickly. >> carmen, kent, good to have you on the program. >> thank you. >> up next, middle east peace and the recovery of the global economy. my conversation with former british prime minister tony blair is next. other bold-faced names of this week's clinton global initiative. and the lessons of the business world to the indicational woes. what bill and melinda gates are doing to repair america's schools. let's take a look at the stock market performance as we head to a break.
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sfoo it has the benefit of the franchise and is critical for the economy. special constraints can apply, and it's really justified. i'm a xwraet fan of government involvement, but in that particular sector, it's critical that all people working in the operation are driven by a general interest. >> i think we are in a fragile recovery. i think we're seeing the beginnings of some growth in canada, but i wouldn't underestimate in canada, united states, globally, how much this growth really is due to stimulus measures, monetary and fiscal measures. >> i think now we are done in terms of bottom iing. the market is still 10% down, because also what happened in the market, i think, was too much too quick. >> i believe that we have
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extremely friendly relations twreen the czech republic and the united states. that's the first thing. >> hello. the government and business leaders i spoke with this week in their own words at the clinton global initiative in new york. one special guest, the former british prime minister tony player. he is currently serving as special envoy to the middle east on behalf of the u.n., u.s. european union, and russia. we talked about the connection the israeli-palestinian peace process has to economic stability in that part of the world. >> one thing you think about spending so much time out there is if you go and stand on the jordan side, you know where moses looked over the promise land, so you are in jordan. you look over the whole of what would be a palestinian state. you can see right into israel. if you were high enough, you could see right into the sea. okay? it's a small bit of land, and everybody knows there that if you can't get security, there's
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going to be no possibility of getting either economic prosperity or states living side-by-side in such a small bit of land, but on the west bank in the palestinian side, there actually has been a big change in the last year to 18 months. i travel around there. these cities that used to be with militia running them are now with clever forces, some of which the americans have helped train that are keeping order there, so we're steadily building it, but here's the problem. it's always fragile until you get a final agreement, and obviously, gaza, which is separate from the west bank, is still in the very, very bad state, indeed. >> let me get your sense on the economy globally right now after the financial crisis that we've all been through. how would you characterize things in the u.k. right now? >> i think people -- there are sudden signs of recovery.
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the house markets just coming up a little bit now. i think people are still very uncertain. you know, it's been such a shock to the system that it will take time for people to recover confidence completely, and i think then the question is how do we make sure that in this recovery, you know, it doesn't just kind of pick up a little bit, but we start to see the economy really move and to make the difference on the jobs market and on living standards. >> and is it fair to say we'll probably see a recovery that is muted and bump along the bottom for some time? that's certainly the case in the u.s. is what we're hearing. >> i think the difficulty with the recovery is the fact that you're not any longer falling off the edge of the cliff. it's not the same as getting back to the high ground that you used to be on. you know what i mean? i think the issue now is how do we actually make sure that we
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have the policy that is promote enterprise, creativity, give the private sector some momentum. >> is the biggest issue still the u.s. consumer? a lot of countries out there saying, look, you know, the biggest -- the most important market is not moving, and that's one issue. i wonder if we're actually seeing a change in policy in terms of government policies in terms of, you know, trade issues. you saw obama's stance on tires coming from china and then some retaliation coming out of china. is that going to impact the consumer? is that going to impact broad economic landscapes around the world? >> i think that the single most important feature of the modern world is this interdependence, the interconnectedness of the economy. so actually what happens in china also matters today as well as what happens in the u.s. now, you know, there will be trade issues from time to time even in the best of times, so don't -- in general terms, i'm
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convinced the less protectionism, the more free trade, the better. >> do we need international standards across the world in terms of the financial system, and has this now taken a back seat to other issues, for example, in the united states we're talking so much about health care. it seems to have put financial reform on the sidelines for a bit. what are your thoughts on financial reform? >> i think the most important thing
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thing. >> the reason why every major nation in the world looks at their health care system is because of the cost of it. you know, that's not divorced from the economy. the stronger the economy, the better able we are to afford the health care system we have. >> final question, what would you like to see come out of the g-20s? what wau like to walk away and say this is a success? >> i think what happened to the london summit was very important because it gave a clear direction. i think what people want to see this time is a continued clear direction. a sense of coordination coming together, the major economies of the world at least greeg of a basic framework for global economic policy. >> my thanks to prime minister tony blair. up next on the "wall street journal" report, what's the richest man in the world doing with his money and his time? bill gates on fixing america's schools and how high-tech will have an impact. >> where the computer can see, it can talk, it can listen. it can talk, it can listen. the
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welcome to progressive. how may i help you? i'm looking for a deal on car insurance. i think i might have a coupon in here. there's an easier way. we've got the "name your price" option. you do? follow me. you tell us how much you want to pay, and we'll build you a policy that fits your budget. and i still get great coverage? uh-huh. go ahead. you're the boss. i'm the boss of savings. more like the c.e.o. oh, oh. no glass ceiling. the freedom to name your price. now, that's progressive. call or click today.
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in poland, cargill borrowed the idea... for something quite different. small polish farms had difficulty getting... affordable feed for their smaller herds of animals. so cargill created a way to bring the feed... directly to them... on musical delivery trucks, selling a few bags per visit. ( dog barks, horse neighs ) keeping the small farmers competitive, and their animals happier. this is how cargill works with customers. >> gaet school suicide a joipt effort between viacom and the bill and melinda gates foundation. it's aimed at broadening americans' involvement in the crisis in education. in a wide ranging conversation i recently spoke with bill and melinda gates about science fiction, science fact, and what they hope to achieve with this program. >> over one-third of the kids
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drop out. even the kids who graduate are really ready for a college education, and so by raising that awapeness, we hope that people will look at the few success stories and demand improvement. >> and, melinda, it is pretty extraordinary that this is supposed to be the richest country in the world and we do have these shortcomings. can you talk to us a little about why we have these short comings in our education system? what's what's wrong? what is broken? >> what's broken today is that the schools really aren't serving all kids well. they serve some of the kids well -- about one-third of the kids today are actually served very well by the public school system -- but we're leaz'ng behind to-thirds. we don't have the right curriculum and expecting for all students. not just some students. we don't have an effective teacher today in every single classroom around the united states. that's imperative. we don't collect data to see how kids are doing as they progress through the school system. those are all failure that is we need to address. >> well, today there's want a measurement system that's really used to encourage improvement,
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and part of the idea of collecting the data using new telling nolg, having more charter schools where experiments can be run for se of those ideas to be -- that work can be transferred to all those kids. these things need to be done. >> melinda, is there another scho>1 system away from the united states that you could see the u.s. modelled like or something similar that perhaps we should be replicating? >> well, we are seeing great education systems across the world. some of them are in the nordic regions up in netherlands, sweden. we're seeing good models in china. some in india. we're going to take a lot of those models and replicate them. i think the most important thing is some great models are happening already in the united states. we have fantastic charter schools that are taking kids from -- minority kids from across the nation no matter what circumstances they come from and educating them well. it's getting those examples spread into the u.s. public school system zoosh how can
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technology play a more important role, bill, in terms of the meta morph sis of the education system? do you see technology really advancing things substantially? >> it definitely has a role to play. if you want to look at data in a rich way, see the trends, if you want to take the bets teachers and have their video on-line so that an advanced student or a student is behind or a teacher wants for learn c access that. a path to diagnose where you're falling behind so you can focus that student center team m right place. we are funding, along with these personnel system improvements, a lot of use of technology so a teacher can even take on a web cam and have part of the day they want advice on how to do better and get feedback. >> let me ask you a question away from secondary school. i heard an amazing fact just this week from gary becker, the nobel laureate from university of chicago saying 60% of higher degrees in education are going to women.
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do you have any thoughts about how women and men are diverging in terms of their education over the long-term? >> well, we are seeing a lot movement in getting law degrees, and even when i was graduating from college, law degrees and medical degrees and business degrees. i think that is fantastic for the nation. what we have to be careful is that we don't leave the men behind and particularly that we don't leave minority men behind. i think where we're still focussing on math and science and getting girls into careers that are also great professional careers in addition to the ones i mentioned, that's really important. also, serving the minority boys really well. >> interesting. let me just ask you a question about technology. can you talk to us a little about what you believe are sort of the long-term trends, maybe the most innovative things hamg happening right now? is it mobility that's going to have legs over the long-term? is it something else? where do you see technology going, whether it is for education, health care, which you've spoken so much about in the past or something else? >> well, mobility has already
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happened, and that's spreading out. big breakthroughs are where the computer can see, it can talk, it can listen. the screen is sort of every wall. you even have robots. you know, there are some horizons out there that you are just starting to see the glimpts of. >> should we be worried about that? i remember bill joy writing an article in "wired magazine" that robots will take over and we should be worried about human jobs. >> robots can be very hefl, and, you know, there are safeguards we have to have for all new invasions, but i think overall, know, mechanization has been good and this will help us interest w some of the great problems we have. >> my thanks to bill and melinda gates. up next on the "wall street journal" report, we'll take a look at the news this upcoming week that will have an impact on your money, and 85% of the global economy, 20 world leaders, 3,000 journalists and three rivers. the world comes to pittsburgh. ez
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sfreechlt check out our website wsjr.cnbc.com. you can find a link to my blog investor agenda at@cnbc.com. here's a look at the stories that may impact your money this week. on tuesday the kay shiler home price index will be released. it's an important indicator of how the housing market is doing right now. sdmrimplgts thursday federal reserve chairman ben bernanke will testify before the house financial services committee on monetary policy. also, the latest figures on personal income and spending
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will be released. and total auto sales for the month of september also reported that day. on friday the labor department issues the jobs report for the month of september. typically a market mover. we'll find out if the unemployment rate has changed from last month's reading of 9.7% much the company unemployed. and, finally, today andy warhol's hometown got its 15 minutes of fame this week. pittsburgh hosted 11 presidents, seven prime ministers, one chancellor, and a king at the g-20 summit on the global financial crisis. the burg ranks sefbt in the nation as home to fortune 500 companies. alcoa, hein sgr and u.s. steel. forbes recently named pittsburgh as one of america's best cities for job growth. that's it for us for today. next week what your kids are eating at the school cafeteria. we'll talk to a different kind of lunch lady. join us for that. each week keep it right here where wall street meets main street. have a great week, everybody. i'll see you again next weekend.
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>> i'm sarah and this is "open house." today we travel to exotic bali for tips of dressing up your desiit

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